US appeals court blocks Trump admin from enacting new plans to slash consumer watchdog staff

June 19 (Reuters) – A federal appeals court on Friday blocked the Trump administration’s plans to immediately slash the workforce at the U.S. Consumer Financial Protection Bureau by about two-thirds, delivering a setback to the White House’s protracted efforts to shrink the consumer watchdog.

The order from the U.S. Court of Appeals for the District of Columbia Circuit came in response to a revised plan the Justice Department submitted in late March following repeated legal defeats over its plans to decimate if not eliminate the CFPB.

The appeals court had been reviewing the administration’s appeal of a March 2025 injunction by a federal district court judge which temporarily barred the mass terminations.

The Justice Department, which previously tried to cut up to 90% of employees, had argued that it should be permitted to carry out its new plan immediately.

It also argued that the case should be returned to the district judge with a 45-day deadline to reassess the injunction.

The appeals court on Friday granted the administration’s motion to return the case to the district court, but rejected the requests to resume staff cuts or impose a deadline on the district judge.

The CFPB was created by Congress after the 2008 financial crash to police consumer financial products.

Trump and other high-ranking officials have called for the agency ​to be abolished, accusing it of being a politicized burden on free enterprise. Democrats and agency defenders say damaging ​the agency amounts to ​a giveaway to ⁠industry at the expense of consumers.

Barred legally from enacting the most drastic actions, the administration has taken other measures to weaken the agency. 

In May, the agency said it would reassign all staff to its Washington headquarters, a move likely to drive resignations. Earlier this month, Trump nominated a vocal CFPB critic to head the agency moving forward.

(Reporting by Kenrick Cai in San Francisco; Editing by Don Durfee and Andrea Ricci)

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